Halftime: Financials Emerging as S&P’s Achilles Heel?

Both the Dow and S&P moved higher on Tuesday with bulls finding two areas of the market attractive; technology and retail .

Chatter on the Street suggested both sectors may have been oversold as investors went into ‘sell first and ask questions later mode’ following the Japan quake.

"A lot of stocks got taken down sharply as a result of what was going on in Japan, and very unfairly, particularly in the technology space -- and you are seeing technology and retail kind of lead the charge higher." explains Peter Kenny, managing director at Knight Equity Markets in a Reuters interview.

The Word on the Street Now

The Fast Money traders weigh in on which trades you should put down, with Rich Ilczyszyn Lind-Waldock senior market strategist.

Meanwhile, investors were not willing to put money to work in the financials . In fact, it was among the few groups struggling and only made nominal gains late in the session. To make matters all the more bearish, both Bank of America and Morgan Stanley sank to a new lows for the year.

Why aren't financials confirming the rally? Are they the S&P’s Archilles heel?

Instant Insights with the Fast Money traders

Trader Brian Kelly worries that bank stocks may in fact be the Achilles heel in the S&P’s rally. He believes that the inability of financials to participate not only diminishes the credibility of the rally but the quality of the whole recovery. “We can’t have an economic recovery if the engine isn’t working – and the engine is the financial system. It’s not transferring money from those who have it to those who need it and without that we can’t have a sustained economic recovery,” he says.

Trader Steve Cortes shares that bearish outlook largely because of price performance. “I’m short Bank of America,” he says. If you look at the performance in BAC over the past month its down about 7% against the S&P which is only 1% lower.”

Joe Terranova is also cautious. He’s worried about the downward spiral in housing -- especially the new reports which suggest the sector is facing a growing number of foreclosures -- and the impact on banks.

Patty Edwards tells the desk she’s long financials but feels it’s important to pick and choose. She likes Bank of Montreal and BlackRock. "Neither of those firms have much exposure to the mortgage mess," she says.

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HOME DEPOT BUY BACK

Shares of Home Depot rallied on Tuesday after the company announced plans to buy $1 billion of its shares.

What should you make of it?

Home Depot is tapping the bond market to do this, explains Joe Terranova. "Normally the Street is not comfortable with that, but I think it works in this case. With the stock a little south of $37 I think there’s upside to $40," he says.

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OTHER BIG BUYBACKS

In fact, Home Depot is among a number of companies buying back their own shares. Take a look:

Steve Cortes finds all the buybacks mixed. "For the near term buy backs have been constructive but it also suggests these companies are not able to reinvest in their core business, nor can they find attractive valuations. In some ways it’s a concession," he says.

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TICK BY TICK: AMAZON SURGES INTRADAY

The traders were also watching the action in Amazon, which climbed higher after the company released details about its "Cloud Player" music service.

The move comes one day after rival eBay announced plans to acquire GSIC Commerce in a move to that could make it a more of a e-tail powerhouse.

What’s the trade?

Steve Cortes suggests looking at Amazon, but not for online retail. "I think it offers some value as a stealth cloud play," he says.

"I love what Amazon is doing on the cloud side, but I think the valuations in eBay are compelling," adds Patty Edwards. She especially likes their acquisition of GSI Commerce.

Brian Kelly is also bullish eBay but for their PayPal division. "The world is going toward mobile payment systems and Ebay is the leader," he says.

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MARKET MYSTERY: WHAT’S WRONG WITH COPPER?

Time for a market mystery: The action in copper has been relatively weak over the past few days, though it did turn higher on Tuesday.

Why hasn’t t Dr. Copper confirmed the market's rally?

Lind-Waldock Senior Market Straetgist. Rich Ilczyszyn thinks the weakness in copper is largely due to fundamental headwinds. He's particularly concerned about the reduction in autos in the wake of the Japan quake. "63 pounds of copper are needed for each auto," he says. And he's also watching the weak data on US housing as another drag on the red metal.

It all suggests that "copper is the most economically sensitive metal of all the metals," explains host Scott Wapner.

Although Joe Terranova thinks the bull story in copper remains in tact with oil over $100 he doesn't expect it to break out.

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Trader disclosure: On Mar. 29, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Steve Cortes is Long (CSX). Steve Cortes is Long (SDY). Steve Cortes is Long (EXC). Steve Cortes is Long (SO). Steve Cortes is Long (RIMM). Steve Cortes is Long US Treasuries. Steve Cortes is Long U.S. Dollar vs. euro . Steve Cortes is long U.S. Dollar vs. yen. Steve Cortes is Short (F). Steve Cortes is Short (BAC). Steve Cortes is Short (UNP). Steve Cortes is Short (DBA). Steve Cortes is Short Wheat. Steve Cortes is Short Corn. Joe Terranova owns (AAPL) Puts. Joe Terranova Owns Puts (VRTS). Joe Terranova Owns (AKAM) and (AKAM) Calls. Joe Terranova Owns (CNX), (C), (GS), (JPM), (UPL), (MS), (PBR), (BAX), (TEVA), (IBM), (XOM), (JNPR), (AAPL), (DIS), (CVI), (RSX), (CNQ) and (BTU).

Comcast Is The Parent Company Of CNBCComcast Is The Parent Company Of NBCUniversalGE Owns 49% Of NBCUniversalGE Owns 49% Of CNBC

PATTY EDWARDSEdwards is Long (AAPL) for ClientsEdwards is Long (GOOG) for ClientsEdwards is Long (AMZN) for ClientsEdwards is Long (LQD) for ClientsEdwards is Long (LQD) for ClientsEdwards is Long (BKCC) for ClientsEdwards is Long (SPY)Edwards is Long (QQQ)Edwards is Long GLDEdwards is Long (SLV)Edwards is Long (PGM)Edwards is Long (SPY) for ClientsEdwards is Long (QQQ) for ClientsEdwards is Long GLD for ClientsEdwards is Long (SLV) for ClientsEdwards is Long (PGM) for ClientsEdwards owns (HD)Edwards owns (JNK)Edwards owns (BKCC)Edwards owns (BMO)Edwards owns (DIS)Edwards owns (LQD)

BRIAN KELLYAccounts Managed by Kelly are Long (ATW)Accounts Managed by Kelly are Long (BBT)Accounts Managed by Kelly are Long (DBA)Accounts Managed by Kelly are Long (EBAY)Accounts Managed by Kelly are Long (GLD)Accounts Managed by Kelly are Long (SLV)Accounts Managed by Kelly are Long (MCP)Accounts Managed by Kelly are Long (MON)Accounts Managed by Kelly are Long (TSN)Accounts Managed by Kelly are Long (VLO)Accounts Managed by Kelly are Long oilAccounts Managed by Kelly are Long natural gasAccounts Managed by Kelly are Long goldAccounts Managed by Kelly are Long silverAccounts Managed by Kelly are Long Short (IXG)Accounts Managed by Kelly are Long Short (XLF)Accounts Managed by Kelly are Long Short copper

JOE TERRANOVATerranova is Chief Market Strategist of Virtus Investment Partners, LTDVirtus Investment Partners Owns More Than 1% Of (ABAX)Virtus Investment Partners Owns More Than 1% Of (AMKR)Virtus Investment Partners Owns More Than 1% Of (CCG)Virtus Investment Partners Owns More Than 1% Of (CASS)Virtus Investment Partners Owns More Than 1% Of (CSVI)Virtus Investment Partners Owns More Than 1% Of (EXR)Virtus Investment Partners Owns More Than 1% Of (FCFS)Virtus Investment Partners Owns More Than 1% Of (KRC)Virtus Investment Partners Owns More Than 1% Of (LDR)Virtus Investment Partners Owns More Than 1% Of (LPHI)Virtus Investment Partners Owns More Than 1% Of (NCRI)Virtus Investment Partners Owns More Than 1% Of (DBV)Virtus Investment Partners Owns More Than 1% Of (XLB)Virtus Investment Partners Owns More Than 1% Of (XLV)Virtus Investment Partners Owns More Than 1% Of (XLP)Virtus Investment Partners Owns More Than 1% Of (XLY)Virtus Investment Partners Owns More Than 1% Of (XLE)Virtus Investment Partners Owns More Than 1% Of (XLF)Virtus Investment Partners Owns More Than 1% Of (XLI)Virtus Investment Partners Owns More Than 1% Of (XLK)Virtus Investment Partners Owns More Than 1% Of (XLU)Virtus Investment Partners Owns More Than 1% Of (SUBK)Virtus Investment Partners Owns More Than 1% Of (WDFC)Virtus Investment Partners Owns More Than 1% Of (YDNT)Virtus Investment Partners Owns More Than 1% Of (DOM)